The first checks farmers will receive under the 2002 farm bill are not likely to be in the mail until this fall. But USDA has been working for months to make sure farmers receive the new payments in the correct amounts and as early in the fall as possible.
The same week the House voted 280-141 to approve the Farm Security and Rural Investment Act of 2002, USDA officials were at a county FSA office in Virginia, watching a demonstration of new computer software designed to quickly update producer bases according to the new farm bill's provisions.
“We have been doing everything we can to prepare for the implementation of the new legislation,” said Hunt Shipman, deputy undersecretary of agriculture for farm and foreign agricultural services, who observed the new software along with Undersecretary J.B. Penn. “And we think we will be ready.
“There were some things we couldn't do because there were too many differences between the House and Senate versions of the farm bill. If we had picked the wrong version, we would have been no better off than if we had not started.”
Shipman said USDA's first priority would be to update the crop bases of producers who elect that option under the new law. USDA will make the balance of this year's Agricultural Market Transition Act or AMTA or direct payments due producers under the new 2002 farm bill using the updated bases.
Under the 2002 law, producers may retain their current AMTA base acres and add oilseed acres or update bases using 1998-2001 acres planted and prevented planted for all covered commodities. This fall, farmers who have already received their 2002 AMTA payment will receive a second check for the difference in the latter and the new direct payment rate.
“We already have software in the county offices to ‘scour’ our existing records and help us put together an easily digestible report on what we know about a producer,” says Shipman. “That will enable us and him or her to figure out where there is missing information or if he has information that he needs to come in and provide us.”
The new Farm Service Agency computer software will generate a letter advising farmers of the missing information and schedule an appointment for them to come in and provide their updated crop acreages.
One reason farmers may have to fill in the gaps in planting history is that the Federal Agricultural Improvement and Reform Act of 1996, or Freedom to Farm, stopped mandatory acreage certification by producers.
“It (mandatory certification) will be part of this new farm bill, and that's something that we will get started on soon as well,” said Shipman, who served as a legislative aide to Sen. Thad Cochran of Mississippi before moving to USDA to help with the transition to the new administration in January, 2001.
“We think we can do that at the same time the producer comes in to upgrade his bases. There is a question of whether we can have the new rule — the formal Federal Register notification process — in place in time to do that, but we would like to do that if we can.”
USDA officials surprised many critics of the federal bureaucracy when it issued checks for the 2001 supplemental AMTA payments the day after President Bush signed the legislation authorizing those payments last August.
Agriculture Secretary Ann Veneman was referring to that quick action when she told reporters farmers should not anticipate receiving the new payments in August this year.
“I think it's too early at this point to give any kind of time frame,” she said. “But I think what's important is that the farmers will have the certainty that there will be supplemental assistance coming. While we can't give an exact date, there is that reassurance that there will be that assistance.”
“Those (last August's) payments really were the result of an ability to just push a button and utilize the records we already had in place,” said Shipman. “The new bill will be more complicated because of the base and yield updates.”
At the same time the Farm Service Agency is updating producer bases and beginning to work on yield updates, it will also be issuing the remaining payments due under the 1996 farm bill. For several reasons, about 15 percent of the $4 billion in payments for 2002 under the 1996 farm bill haven't been made.
Completing those payments will allow USDA to begin calculating the balance of the AMTA payments that are due producers as a result of the new farm bill.
“The new farm bill basically makes another $1.2 billion in fixed, decoupled payment funds available or about $5.2 billion total for FY 2002,” says Shipman. “We've been calling that additional amount the 2002 top-up.
“That additional payment would be made on an updated base if a producer chooses. It will be a complicated process, but we think we have figured out how to do it. We have a group of state and county FSA employees from around the country who we have been working with to get their insight and work through the necessary steps to anticipate this process.”
USDA will then turn to payment yields, which producers may update for the counter-cyclical payments authorized in the new law. Those payments cannot be made until six months after the beginning of the crop-marketing year to allow time for USDA to project the National Average Selling Price for each crop.
“The first counter-cyclical payment that the law prescribes for us to make would be October of this year,” says Shipman. “The law is very prescriptive about when these payments can be made, so it's not USDA dragging its feet. In many cases, we may be able to get these programs up and running quickly, and, in others, it will take a tremendous amount of time to implement them and to give producers time to come into the county offices and provide needed information.”
When they were in the FSA offices in Virginia, Shipman said, “we saw farms that were 700 acres that had eight different crops in 40 units. When you think about farms with tobacco and peanuts in small acreages, it can be very complicated.”
USDA will also continue to make loan deficiency payments or LDPs while it implements the new law, “and those payments will be made on the new loan rates.”
Shipman would not predict how soon that might be. “I don't want to say that it will be within the month, but we will make it as soon as possible,” he noted. “I don't want to create unrealistic expectations for producers.
“We will be aggressively trying to keep producers informed so that they know what to expect; so that they don't get surprised; so they don't think checks will be in within the next few weeks or even the next few months because this process will be somewhat lengthy.”
As part of that effort, Shipman said, USDA has established a new Web site aimed at helping farmers, ranchers and the general public learn the latest information about the new farm bill.